GWEN IFILL: The attack was violent and shocking. As the four Americans drove through Fallujah last week, they were ambushed, their SUV’s set on fire, and the corpses mutilated. But it quickly became clear these were not soldiers; they were civilians, among the hundreds of bodyguards and former military men hired to provide private security in Iraq. The four in Fallujah worked for Blackwater U.S.A., a security and training company based in North Carolina.

BLACKWATER TRAINER: Safety on.

GWEN IFILL: Like many Blackwater employees, each had once served in elite military fighting units. At the 6,000-acre North Carolina facility, employees and visiting law enforcement personnel practice at firearm target ranges and in a simulated town built to train for urban warfare.

About 450 of Blackwater’s contractors work in Iraq for private firms and for the Pentagon, many charged with providing security for non- military coalition employees, including U.S. Administrator, Paul Bremer.

The “Washington Post” reported today that Blackwater commandos also fought off an attack on U.S. Headquarters in Najaf on Sunday. There, Blackwater helicopters dropped supplies and lifted out a wounded marine.

GWEN IFILL: So what are the pros and cons of hiring freelancers to fight a war? For that, we turn to Doug Brooks, the founder and president of the International Peace Operations Association, a trade organization for the military service companies; and Peter Singer, a former Pentagon official and author of “Corporate Warriors: The Rise of the Privatized Military Industry.” He’s also a national security fellow at the Brookings Institution.

Doug Brooks, most of us until last week had never heard of these freelancers, these military freelancers, these private companies. How many are they? How big a factor are they right now in this war?

DOUG BROOKS: Well, they’re very important to the war. The military uses private companies to do all sorts of things, logistics and support and in some cases to provide security assistance. It’s not really such a new phenomenon. They’ve been using private companies since the beginning of the military. But what I think we’re seeing a little bit more is the military is focusing more on its core functions and using private companies to provide support and to provide a little security in areas that the military doesn’t want to get involved in.

GWEN IFILL: How many would you say are currently working in Iraq?

DOUG BROOKS: The numbers vary. It depends if you’re counting — you know — the private Iraqis that are working there and so on, I mean, anything from maybe 6,000 westerners, British, Americans, South Africans and so on then you also have Fijians you have Nepalese that are working there doing security work and then quite a few Iraqis who have been hired by these private companies to protect the oil industry and other places.

GWEN IFILL: Peter Singer, is this something that has just been happening all around the world and we’re just noticing it now in Iraq?

PETER SINGER: Well, I think it’s global; the scale in Iraq is greater than we’ve ever seen. But this industry really took off at the end of the Cold War. Right now it operates in about 50 different conflict zones.

GWEN IFILL: Why is it that? Why are they needed?

PETER SINGER: It’s basically three things coming together right now. One is good old-fashioned market forces. We have much smaller militaries. The U.S. Military is about 35 percent smaller and it’s deployed to more and more places. So these companies are meeting a gap in the market. The other thing is you have changes in warfare. Basically civilian technicians are playing greater roles as we use more technology off the commercial market.

And then the final thing is basically the power of ideology, the privatization revolution. We’ve seen everything from private security, private prisons, all sorts of government functions that have been turned over to private companies. Well the last one, the core one was the military realm. And we’re seeing that happen right now.

GWEN IFILL: Are these private organizations accountable in the same way that a military organization would be?

DOUG BROOKS: Ultimately they are. And especially in Iraq they’re working as contractors for the U.S. Military. The U.S. Military can pull the plug on their contracts if they do anything wrong. They have rules of engagement the same as the military. And their rules are graded depending on the capability of the company. There are lots of ways to take, to ensure the accountability of these companies.

GWEN IFILL: But I’ve read in Fallujah with these particular four contractors from Blackwater last week, that they were in an unarmored vehicle they were traveling without back up. That is something that a CIA or a military operation would have never allowed.

DOUG BROOKS: That might be true. In fact, I think they do take risks when they do these sorts of jobs. Now they may have been covered under military back-up that just didn’t arrive. Remember there were other attacks going on in the area at the same time. I believe five engineers were actually killed just outside of town before this attack. So there may not have been a back-up available.

GWEN IFILL: Is this a cost-saving issue, Peter Singer? Does it save money for us to do it this way.

PETER SINGER: You have to think of costs in two ways: On the economic side and the political side. On the economic side what’s interesting is that we’ve never seen a study that proves global savings here. We’ve never seen a study that establishes that there are actually cost savings because in a lot of cases we’re comparing what happened and what didn’t.

Theoretically if you had good competition, if you had good oversight, if you’re only using these companies when you needed them maybe it would save you money but we’re talking about government contracting. So often you don’t have good competition, politically connected firms tend to win contracts. You don’t have good oversight.

Then finally we often kid ourselves for political reasons. We don’t hire and fire these companies because the operations they’re in last a long time. The Bosnia one is still going on today. The Iraq ones will probably still be going on five years from now. Now, there’s another part of this equation, which is the political costs. You definitely do see those. For example, when the casualties happen they don’t carry the same weight that they do with American soldiers. We’ve had between 30 and 50 contractors killed that we just haven’t heard about in the press here.

GWEN IFILL: Why don’t you weigh that for us, the political versus the fiscal costs.

DOUG BROOKS: Well, I think it’s a lot cheaper to use private companies. You use far fewer private people to do a task rather it’s logistics or cooking or whatever else. And oftentimes private companies will do things differently. They use a lot more local resources. To bring an engineering unit for example to build barracks for our troops in Iraq would be extremely expensive to bring in the troops and their equipment and so on. When you hire a private company, they can hire local companies to actually build the barracks. They just simply provide the supervision and the cost savings are enormous.

GWEN IFILL: We’ve heard two nights running from reporters on the ground in Iraq, Alissa Rubin tonight and Jeffrey Gettleman last night, both talking about what appears to be the sorry state of the Iraqi police, the people who are being trained the take over. Is this a gap that especially if the June 30 handover happens on schedule that these private firms are going to be expected to fill?

PETER SINGER: They’ve already started to contract out some of these services not only on the training side. The training for the post Saddam police, paramilitary force and army has all been outsourced to private companies but now, for example, the security for the CPA headquarters, that contract was just let out. So the role is already extensive — at least 15,000 of these guys on the ground carrying out military jobs. It’s likely going to grow after the June 30 handover.

GWEN IFILL: Do you agree with that?

DOUG BROOKS: I agree. In fact I think what these private companies offer is a real surge capacity. When you need to do a large-scale training, when you need to bring in a lot of people fast to do a certain thing you can go to the private sector. There’s an enormous capability to add to what the military is able to do. Without these private companies the military would have to bring in ten or even hundreds of thousands of additional people.

GWEN IFILL: So speaking of bringing in tens of thousands of additional people let’s talk about troop strength. Peter Singer, does this… does the existence on the ground of these kinds of private military companies essentially allow the United States not to send additional troops to back up the troops who are already on the ground? We’ve heard Secretary Rumsfeld say time and time again he’s waiting to hear from General Abizaid to see if he needs, he says he doesn’t need anything, would he need more troops on the ground if he didn’t have these private contractors?

PETER SINGER: Oh, I think he already needs more right now and that’s pretty obvious. If you didn’t have the contractors you’d need even more. Basically this market is filling a demand. And the demand has both political causes and economic causes. But really you have sort of four choices here. You either expand the force by sending in more regular forces or reservists. You either don’t carry out these kinds of discretionary operations which don’t involve a national mobilization which Iraq falls under that.

Third, you make the political concessions necessary to bring in allies or the U.N. to fill these tasks or, four, you bring in private contractors. And so far because of the cheaper political costs, we’ve chosen to go to the private route. But of course that has a lot of short- and long-term implications that we really haven’t thought of here. What concerns me is how we’ve sort of ad hoced our way into this system.

There hasn’t been a public debate and discussion and I think most people are really surprised to find out how extensive and how mission critical the role that these private forces are carrying out. Remember they’re not part of the chain of command. And each of them has their own operating procedures and not all the businesses can have the best practice here.

GWEN FILL: Let’s follow Peter Singer’s lead-in and use the word ad hoc as a verb. Have we ad hoced our way into this situation without enough public oversight of essentially what is a public role?

DOUG BROOKS: I think this has been going on for a long time. I don’t think it’s particularly unusual. I think what we’re seeing is as I say a military that’s more focused than before. Whether we take just about any of those options we’re still going to have a private sector supporting it. And that’s fine. The private sector can do whatever needs to be done to fill in the gaps. If the military is going to bring in additional logistics people, then the private sector can work on something else. I mean it’s not a big deal from the private sector perspective.

They’ll be there and always will be there in this kind of mission. Do they provide critical services? I think yes. Is there any risk in that? Not really. I think we’re seeing that the private companies do have staying power in Iraq. As far as I know not a single company has left Iraq because of what’s going on. I think we see lots of people still willing to work in these services and take risks. The money is not bad but I think people believe in the mission there.

GWEN IFILL: Does the government have other than just pulling a contract, does the government… I want to return to this idea of what control the government actually has over these contractors. They don’t leave but they don’t leave because they’re getting paid perhaps. Does the government have the right to control their movements the way they dress, the way they cradle their arms in public, the way they do things that maybe a straight military man wouldn’t do? Can they control that on the ground or do they just say you figure it out, do it the way you need to do it and we’ll move on?

PETER SINGER: Unfortunately again this is another example of how we’ve ad hoced our way into this is that essentially the companies set up their operating procedures and there’s no other than a minimal registration that sort of sets limits in training them what kind of weapons you carry — it’s up to the firms to determine that. And also we’re talking about extra territorial law here so they’re not part of the chain of command. They’re also not part of the code of military justice. We have to remember that they’re also not exclusively working for the Defense Department.

They’re working for other companies, whether they be reconstruction or even media. So when they get into trouble, there’s not established systems to support them and also if they do commit some kind of malfeasance, you know, you have professional companies that act like professionals and you have other companies that are made up of cowboys that act like cowboys. There’s not a legal response to it. The most that the combatant commander can do is pull the registry and say leave this zone. Well, that’s not sufficient response if someone commits a felony for example. And in turn the companies often complain that, look, we’re not getting the support from the military. When we come in under fire you’re not supporting us. There’s contractors that have gone missing and there hasn’t been the kind of support out there searching for them the way we’ve had if say an American soldier went missing.

GWEN IFILL: One of the… when you weigh those two options on one hand they’re not accountable by court martial for instance on one hand. On the other hand, maybe Marines aren’t rushing to rescue non-marines as aggressively as they would Marines — if those are the two risks….

DOUG BROOKS: There is more accountability than that. Essentially because it is an occupied country they are under U.S. law. They can be taken back and tried in U.S. Courts in fact. In terms of the back-up, I mean that is an issue. This is what we’re hearing is that the companies often go to the back-up of military units in trouble but it is questionable whether the military is going to be able to back up the companies.

So we’d like to see more coordination. One of the things that my association, International Peace Operations Association, is trying to do is set up some standards, set up some coordination and make sure that people are communicating over there. The military does control these companies quite tightly in terms of what they’re allowed to carry, in terms of what weapons they use and things like that. It does have a lot of control over these companies that I don’t think is fully recognized.

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